Exporting to the EU — A Guide for US Small Businesses
January 22, 2018
If you’ve tried exporting to countries like Germany, Denmark, Italy, or France, you’ve most likely encountered a few similarities. Or rather, a lot of similarities.
Since these countries (along with 24 others) are members of the European Union, their trade rules have been integrated under the framework of the EU trade policy. Read our guide on how to export to the EU and save time on researching each individual member state.
What is the European Economic and Monetary Union?
The EU Economic and Monetary Union (EMU) is a term for all economic policies aimed at integrating the markets of EU Member States. This includes trade policy as well, along with customs procedures, duties, trade quotas, and tariffs.
For a US business, this means that regardless of where your goods enter the territory of the EU, you’ll most likely encounter the same procedure and treatment (apart from excise duties and value added taxes that vary by member state).
EU-USA Trade Relationship
Although no formal free trade agreement is in place, trade between the EU and the US is relatively free of barriers and high tariffs. Trade tariffs are generally low (under 3%), and business relationships are stable.
Before you can begin exporting, you need to learn about the classification system employed by the EU. All products available in the European single market have a classifying tariff code that will tell you the tariff rates, protective measures (anti-dumping), external trade statistics, and export/import formalities.
The EU tariff classification system gets its codes from three sources:
- The Harmonized System (HS), devised by the World Customs Organization (WCO);
- The EU Combined Nomenclature (CN), which uses HS codes and further subcategories to serve the EU common customs tariff;
- The Integrated Tariff (TARIC), which contains information about the applicable EU trade policy and tariff measures.
Don’t worry if this sounds complicated. There’s a handy tool on the EU Trade Helpdesk’s website: all you need to do is select your products from a menu and the system will provide you with your codes.
Plus, this calculator helps you find out the tariff rates applicable for your products, as well as any product requirements and internal taxes for the member state you’re wishing to export to.
Although the calculator only lists countries that currently have a trade agreement with the EU (meaning that you can’t select the US as your product’s country of origin), you can still do the search by selecting your product, the member state you wish to export to, and any country as the country of origin. The database you’ll get at the end of the search states whether the duties applicable to your products are relative to the country of origin, or apply to all countries.
Since most conditions apply to all exporting countries, you’ll get valuable information about the fees, duties, and taxes you’ll encounter.
The volume of some products imported to the EU is capped by quotas. You can find out where any quotas apply to your products here.
Clothing, footwear, steel, and wood products fall under a special quota. If it’s applicable for your goods, you can check the specifics here.
If you wish to export to the EU, you need to acquire an Economic Operators Registration and Identification (EORI) number. You can do this by asking for help from the customs authorities of the member state you wish to export to, or the EU Delegation in Washington, DC.
When your products reach the EU port of entry, you have to file customs declarations for them. There are several ways to do so: electronically, or you can include a Single Administrative Document (SAD) with your products. You can download the SAD form here.
Once your goods are inspected and cleared at the border, you need to pay all applicable tariffs and taxes before the shipment can continue to its intended destination.
How to Handle International Payments
When you sell your goods to your EU partner, ask them to pay you through Veem. Using unique multi-rail technology, Veem can send international transfers quickly, securely, and efficiently. Since both the sender and recipient are on the same page about every detail of the payment, there are no hidden costs or unpleasant surprises along the way. Let Veem take the burden and all the hassle of international transfers off your shoulders.